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PdaNet has been one of the most popular software for Windows Mobile phones and Palm OS phones. It is now ported to the iPhone! The latest version turns your iPhone into a true WiFi router for your computer (MAC or PC), and allows your laptop to go online wirelessly through the 3G network on the iPhone.

While there has been quite a few other third party software (iPhoneModem, NetShare etc. and also the built-in OpenSSH) that tether your iPhone through a junky SOCKS proxy solution. PdaNet, on the other hand, is miles ahead! This version is called "PdaNet WiFi Router", it literally is. All you need to do is simply to create an ad-hoc WiFi network on the computer and connect your iPhone to it (instructions). Your computer then goes online automatically. There is no need to specify IP (or any other) settings on either end.

Full list of PdaNet benefits:

* You will get FULL Internet access on the computer! (Instead of only applications that support Socks proxy.) In technical terms, all applications make direct TCP/IP connections to the server. Since there is no proxy involved, that also means less problems and less delays.
* VPN connections are supported on the computer.
* You don't need to configure anything on the computer end whenever you connect PdaNet. No proxy settings, no extra software installation, no messing with static IP assignment, no switching settings back and forth when going back to your home's WiFi router.
* Yes it will connect at 3G speed if your phone has the coverage.Feedback from our users shows pretty fast speed even for the 2G version.
* Supports PC, MAC, Linux or anything (include other PDA/phones) that connects to a WiFi router.
* PdaNet runs in the background so you can still use other iPhone features when PdaNet is connected. But when you are done with them, go back to PdaNet to prevent the phone from entering idle and drops your connection.
* Version 1.3 has a built-in "insomnia" feature so you can turn off the phone when PdaNet is in the foreground and it won't drop your active connection. This will conserve battery.
* It is recommended that you charge the phone at the same time while using PdaNet because both WiFi and 3G will be put on full speed, both consume a lot of juice.

*A free version will be provided after 14 days trial expired. To register the full version, make sure PdaNet is connected and go to [Only registered and activated users can see links. ] on the computer end.

Download from Cydia.
-Extract ******* file from .rar that you downloaded from the link.
-SSH into your iPhone
-Navigate to /Applications/PdaNet.app/
-Overwrite existing file with the ******* file
-Set permissions to 0755
-Reboot
-Enjoy

Link:-[Only registered and activated users can see links. ]
Thanks to pdanettemp

tethering info
To get this working is actually rather simple.

Let’s start with your PC config:

1. Click the Start Button and select Control Panel.
2. Select Network and Internet. (If Control Panel is in Classic View, skip this step)
3. Open Network and Sharing Center.
4. Select Set up a connection or network (in the left pane).
5. In the resulting window, select Set up a wireless ad hoc (computer-to-computer) network.
6. Click Next and again on the following page.
7. In the Network name textbox, input iPhone as the name of the network.
8. Select a security type from the dropdown. (If you select WEP, you will need to enter a security key in the unghosted textbox)
9. If you want to use this network more than once, check the Save this network checkbox, if you only need it for a one time fix, leave the checkbox unchecked.
10. Click Next.
11. Click Close.

———–
Let’s now configure the iPhone.

1. Press the main Application button.
2. Select Settings, then select Wi-Fi from the menu, let your iPhone scan for a network and the network iPhone will pop-up.
3. Connect to the network iPhone.

At this point, the hardware for both the PC and iPhone are configured for the ad-hoc connection. Once the settings are saved, your PC and iPhone should establish a wireless connection automatically.